*Nikkei rebounds, up 1.3 pct after 9.4 pct drop on Wednesday
*Hopes for more government steps help buoy the market
*Toyota, Sony gain ground on short-covering
*Retailers fall after Aeon posts H1 net loss
(Adds stocks, details)
By Aiko Hayashi
TOKYO, Oct 9 (Reuters) - The Nikkei average rose 1.3 percent
on Thursday as coordinated worldwide cuts in interest rates
sparked hopes that governments might take more action to battle
the financial crisis, but gloomy results from retailer Aeon Co
<8267.T> weighed on the market.
The rebound came a day after the benchmark Nikkei average
<> plunged 9.4 percent in its biggest one-day drop since the
1987 stock market crash, as growing fears of a global recession
led investors to wipe $250 billion off the value of Tokyo shares.
"The impact of the rate cuts is still unclear, but that
certainly affected the mood of the market," said Soichiro Monji,
chief strategist at Daiwa SB Investments.
"Sellers are afraid to keep dumping shares now because we may
see a lot more counter-measures by governments that could help
the market."
In an attempt to stem the worst global financial crisis since
the 1930s, the U.S. Federal Reserve, the European Central Bank,
the Bank of England and Switzerland, Canada and Sweden all
lowered official rates by a half-percentage point on Wednesday.
[]
On Thursday, Japan's top government spokesman said Prime
Minister Taro Aso has asked ruling party officials to mull
compiling a new economic package to address growing uncertainty
due to the financial crisis. The central bank has said it sees no
need to cut Japan's already rock bottom interest rates.
[] []
The benchmark Nikkei <> added 115.08 points to end the
morning session at 9,318.40.
It finished the previous day at 9,203.32, its lowest close
since June 2003 and lost nearly 20 percent in its five-day losing
streak to Wednesday.
The broader Topix <> climbed 1.8 percent to 915.49.
EXPORTERS GAINS, RETAILERS WEIGH
Exporters, which had been sold off on the worsening economy
overseas and a strong yen, gained ground on short-covering.
"The rebound is largely led by short-covering as the market
dropped far too much yesterday," said Katsuhiko Kodama, senior
strategist at Toyo Securities.
Toyota Motor <7203.T> advanced 4.6 percent to 3,430 yen and
Honda Motor <7267.T> added 2.2 percent to 2,355 yen, while Sony
Corp <6758.T> climbed 6.3 percent to 2,535 yen and Canon Inc
<7751.T> jumped 7.2 percent to 3,430 yen.
Battered financial shares also gained, with top lender
Mitsubishi UFJ Financial Group <8306.T> climbing 3.4 percent to
789 yen. Nomura Holdings <8604.T>, Japan's biggest brokerage,
jumped 5.9 percent to 1,240 yen.
But shares of Aeon lost 3.6 percent to 916 yen. Japan's
second-largest retailer booked a first-half net loss for the
first time in three years after writing down the value of stores
and other assets as it faces weak consumer spending and a slowing
economy. []
Other retailers also lost ground, with Fast Retailing
<9983.T> dropping 4.9 percent to 9,810 yen, while Seven & I
Holdings Co <3382.T> lost 6.7 percent to 2,455 yen, becoming the
top two drags on the Nikkei 225.
The two retailers are set to report their results after the
close on Thursday.
"Earnings at companies reliant on domestic demand are under
tremendous pressure with the domestic economy deteriorating,"
said Toyo Securities' Kodama.
Trade picked up on the Tokyo exchange's first section, with
1.29 billion shares changing hands, compared with last week's
morning average of 910 million.
Advancing stocks outpaced declining ones by nearly 2 to 1.
(Reporting by Aiko Hayashi; Editing by Edwina Gibbs)
